On April 5th, Reserve Bank of India (RBI) announced that all regulated institutions (read banks) must severe ties with the entities that deal with cryptocurrencies in the next three months.
Besides this, the banks have been warned not to forge any new relation with an institution dealing in digital coins. Following this, already-battered bitcoin prices plunge further in the international markets as well as in the Indian cryptocurrency markets.
Not only bitcoins, but other digital currencies such as ethereum, ripple, bitcoin cash, litecoin, EOS, Cardano, stellar, NEO, IOTA and TRON also went for a free fall and fell by upto 8% on Tuesday.
Ripple fell by 3.9%, bitcoin cash declined by 5.8%, litecoin fell by 6% and EOS saw its value falling by around 3%.
Around a week ago, bitcoin price closed at $7,456. At the same time, two weeks and three weeks ago, the price of most popular cryptocurrency (bitcoin) had closed at $7,833 and $8,913.
On Luxembourg-based BitStamp, bitcoin trades at $6,727 while it closed at $6,780 a day before. On Bitstamp, the cryptocurrency had closed at $7,400 a week ago.
On India-based exchanges also, bitcoin price trades lower. On Zebpay, bitcoin price falls to Rs. 4,38,350, ethereum trades at Rs. 25,800, litecoin at Rs. 7,450, ripple at Rs. 31 and bitcoin cash at Rs. 41,480.
During a press conference organised after the monetary policy meet, RBI’s deputy governor B P Kanungo said, “To ring fence the RBI regulated entities (banks) from the risk of dealing with entities associated with virtual currencies, they (banks) are required to stop having business relations with the entities dealing in virtual currencies forthwith.
And (they are also required to) unwind the existing relation in three months.”
He further said, “The deputy governor also said that the digital tokens are getting international attention and regulatory responses are not uniform.
The investment in digital currency for speculative purposes can adversely impact market integrity, and capital controls, and if they grow in their critical size, they can endanger financial stability.”>